Putnam County Estate Planning & Medicaid

Organized Information Makes Difficult Times Easier for Family Members

Part One of putting your affairs in order is having an estate plan in place and updated on a regular basis. Part Two is getting your information organized and discussing it with loved ones.

If you were suddenly and unexpectedly to become incapacitated, would your spouse or adult children know where to find your important papers, be able to reach your estate planning attorney and know what you wanted, if an end-of-life care decision needed to be made?

The Daily Record’s recent article, “How to organize your affairs if you are a senior citizen,” says the first step is to collect your important personal, financial, and legal information so you can arrange it in a way that will benefit you now and your family in the future.  The next step is to create sets of important information and instructions concerning how you want certain things handled when you pass away or if you become incapacitated.

Here are some of the personal, legal, and financial items to consider:

Personal Information

• Make a list of contact information for close friends, clergy, doctors, and advisers such as your estate planning lawyer, accountant, and insurance agent.
• Make a list of medications that you and your spouse take and any allergies and illnesses.
• Include birth certificates, Social Security cards, marriage licenses, military discharge papers, and other important papers.
• List the locations that are locked or password protected, like safe deposit boxes, safe combinations, and security alarms.
• List the companies or people who provide services such as: phone, cable, electricity, etc.
• Write down specific instructions for the care of pets.
• Detail your wishes for organ and tissue donation, along with funeral instructions. If you have a pre-paid contract for the services of a funeral home, include a copy of the agreement.

Legal Documents

• Include all of your estate planning documents, such as your will and any trusts.
• A copy of your financial power of attorney that names a trusted agent to handle money matters if you’re incapacitated.
• A copy of your advance health care directives, including a living will and medical power of attorney, which detail your wishes for end-of-life medical treatment or when you are unable to communicate health decisions for yourself.

Financial Records

• Create a list of your accounts, brokerage and mutual fund accounts, and r other financial assets.
• Make a list of loans, leases, or debts, like a mortgage, car loan, student loan, medical bills or credit card balances. Add to this list, all credit and charge cards with the card numbers and contact information.
• Note any retirement plans, pensions, or health benefits from your current or former employer with the contact information for the benefits administrator or HR Department.
• List insurance policies: life, long-term care, home, auto, Medicare, Medigap and prescription drug insurance policies with policy numbers and pertinent phone numbers.
• List real estate, vehicles, and other properties you own, rent or lease and include the deeds, titles, and loan or lease agreements.
• Detail the location of your tax records and your tax preparer’s contact information.

Having this critical information organized and in a secure location (a home safe or a fireproof box in your home office) will be very helpful for your spouse or adult children. Final point: make sure that family members know where the information has been located and if you use a locked box, make sure that a trusted and reliable family member has a spare.

Reference: The Norman (OK) Daily Record (January 2, 2017) “How to organize your affairs if you are a senior citizen”

Estate Planning Documents Needed When You’re Not Dead

Consider what would happen if you are seriously injured with no estate plan in place? The resulting expense, stress and potential for conflict in the family could be worse than you might think.

With a dramatic flourish, a recent article in AgPro, “4 Estate Planning Documents You Need Beyond a Will,” asks a blunt question: what would happen to your family and your business, if you got hit by a bus tomorrow?

Estate planning attorneys advise that you should make your estate plan to match your current situation, rather than “what-if’s” that may or may not occur many years in the future. If you get hit by a bus, you might die or you might not, so you need a portfolio of “not dead yet documents.” In addition to a will and/or a trust, the documents should include the following:

Power of Attorney. Signing this document means that you give a trusted agent the power to act on your behalf if you become incapacitated. You can also create two separate powers of attorney: one that gives authority to a business partner to make decisions concerning your farm or company; and one naming a spouse or family member to handle your personal finances.

Living Will. This document states your intent that, under certain circumstances, you want medical efforts to be withheld or withdrawn and that you want to be allowed to die naturally with only medication and procedures necessary for comfort and to alleviate pain. A living will can reduce some of the stress and burden from family members, in the event that they have to make an end-of-life decision.

Healthcare Directive. This is a life-prolonging procedure declaration and is the opposite of a living will. It states your intent for healthcare providers to use and continue all life-prolonging procedures that might possibly extend your life.

Health Insurance Portability and Accountability Act (HIPAA) Release. Because of this federal law, a loved one or agent will not be able to access your medical records without a HIPAA release that authorizes access. Having this document in place, will eliminate delays if making decisions requires a look at your medical records.

By having these “not dead yet” documents in place, you provide your family with the tools they need to take care of you in an already highly stressful situation.

Reference: AgPro (November 21, 2016) “4 Estate Planning Documents You Need Beyond a Will”

Before the Thanksgiving Leftovers are Gone, a Gift for Your Family

Of all the gifts on your holiday list, perhaps the best one is to have your financial and estate paperwork organized, sparing your family the stress and misery of an estate scavenger hunt.

This year’s Thanksgiving brought families together to share memories and to talk turkey and football.  However, one topic often overlooked during family gatherings is the more difficult conversation about family, assets, and plans for the future. CBS Boston’s “Our Families: The Important Papers,” explains how frank discussions about important papers and their locations, including wills, contact lists and more, can be a gift to those you love.

It’s a wise plan to have a responsible person in your life who can access your important papers at every age. You should also make sure that your important paperwork is organized and filed so they can find it, so they don’t have to ransack your home looking for these documents.

Begin by making a list of important people and their contact information. You should also make the list of where the important documents are located.

Think about this for a minute: you live in State A, and your widowed sister lives in State B. If something should happen to your sis, you may be hundreds of miles away. Do you have the phone numbers for her friends and the next-door neighbor? What about a list of the important people in her life. How about her doctor’s info? Get that contact information, just in case you need it.

OK, now think about what would happen if you had an accident in another state while visiting this week for Thanksgiving and needed someone back home to find your important documents. Are you organized and prepared so you could tell them exactly where to find them? Could they pay the bills while you were in the hospital out of state?

Next, think about your estate planning. If you don’t have a will when you pass away, your assets will be divided by a judge according to the state statutes.

Before you finish that last bite of turkey, make an appointment to meet with an estate attorney about creating a durable power of attorney and a health care proxy. The power of attorney will allow someone to make legal and financial decisions if you are unable to. The health care proxy lets someone make important medical decisions for you. You can name different people for each, so that someone who is great with finances can help in that arena, while a wise and trusted person can become named as your health care proxy.

Reference: CBS Boston (November 21, 2016) “Our Families: The Important Papers”

Not Named in the Will Means No Inheritance for Woman

Even a long-standing relationship of more than a decade does not entitle a partner to an inheritance, if the person is not included in the will.

A recent ruling by the Pennsylvania Court of Appeals may spark some interesting conversations between unmarried couples about estate planning. The woman, who was not named in her long-time romantic partner’s will, has lost an appeal and as a result will not receive any assets from her partner’s estate. Even the existence of a cohabitation agreement between the two does not give her any legal leverage.

Penn Live’s article, “Woman who isn't named in lover's will can't get a penny from his estate, Pa. court says,” reports that the decision which leaves Galinac empty-handed came in an opinion issued by Judge Anne E. Lazarus.

The decision of the Court of Appeals upholds the ruling by a Westmoreland County judge who honored a request by Tito's four children to dismiss a claim Galinac filed against their father's estate.

Judge Lazarus’ ruling found that Tito and Galinac had been in a romantic relationship for 13 years when Tito died, but that only Tito's kids were named as beneficiaries in his will. The will provided nothing for Galinac, the judge noted.

Galinac claimed that Tito's children were keeping her from even retrieving her property from Tito's home. In reply, Ralph Tito's kids demanded that she give back thousands of dollars they claimed she withdrew from his checking account. The children also argued that a cohabitation agreement Galinac signed barred her from making claims against the estate.

On appeal, Galinac argued that the trial judge Lazarus erred in deciding she had waited too long to contest Tito's will. Judge Lazarus should have allowed her the opportunity to prove she and Tito were common-law spouses, Galinac argued. She also insisted that Tito's children misled her by telling her she was "merely (Tito's) girlfriend" and, as a result, had no legitimate claim to his estate.

Judge Lazarus found Galinac's arguments to be "illogical, irreconcilable and legally untenable," which sunk her chances of success in court. The judge noted that she claimed she had a common-law marriage on one hand, and yet on the other hand said she didn't know if she and Tito were legally wed.

The Judge explained that both parties needed to acknowledge that a common-law marriage existed, but that would have had to have occurred before January 1, 2005, since Pennsylvania no longer recognizes common-law marriages contracted after that date. Since there was no mutual agreement and the pair had never married, Galinac was not entitled to any portion of Tito’s estate.

The lesson here is straightforward: unmarried couples who wish to take care of their partners after one passes, need to meet with an estate planning attorney and have their wishes made clear in estate planning documents.

Reference: Penn Live (November 17, 2016) “Woman who isn't named in lover's will can't get a penny from his estate, Pa. court says”

Do You Need Help Advocating for Your Loved Ones?

Caring for aging parents or an aging spouse requires the ability to advocate on their behalf. Some people find it easier than others, but it can be learned.

We take on many roles when we need to take care of aging family members, from driving them to appointments, managing their schedules, reviewing health insurance coverage, making sure the bills get paid and helping them navigate through health challenges. By necessity, we are also must be prepared to advocate on their behalf during a time when they are vulnerable, as reported by AARP in “How to Be an Effective Advocate for Aging Parents.”

That means knowing what they want for care and quality of life and then making sure those wishes are followed. It also includes helping loved ones manage finances and legal matters, and making certain they receive appropriate and high-quality services and treatments when needed.

Here are a few important skills, many of which you may already possess:

1. Observation. We’re typically too busy or tired to notice small changes, but sometimes the slightest shift in a loved one’s ability, health, moods, safety or needs is a sign of a larger problem or health challenge. You need to catch those changes early to make a difference. Reviewing the services they’re receiving and adjusting any substandard care is another big responsibility.
2. Organization. There’s a lot of moving parts in a caregiving plan. Organization is a real challenge. As an advocate, be sure you can easily access all legal documents you need, like power of attorney for finances and health care.
3. Communication. It’s always an important skill for building relationships, especially with those who help care for your loved ones, like attorneys, aides and doctors. Try to be respectful and set your emotions aside when you are advocating for a loved one. And know that listening is just as important as speaking in effective communication. Be clear, concise and to the point—and show your gratitude.
4. Questioning. Ask questions! But be prepared and do your job of gathering information. Educate yourself about your loved ones' health conditions and financial or legal matters. Don't stop until you’re satisfied with the answers you receive. Take notes.
5. Tenacity. As a loved one’s advocate, you must have their best interests at heart and take the job seriously. When caregiving knocks you off your feet, get back up. Resilience is key.

If you are able to find a caregiver’s support group, you will benefit from the help and experience of others who are facing similar challenges. Also, speak with an elder law attorney. After all, what is an elder law attorney but a professional advocate? He or she will have a great deal of experience and insight to share.

Reference: AARP (November 1, 2016) “How to Be an Effective Advocate for Aging Parents”

Avoid Surprises and Conflict with Frank Family Conversations

There are a few situations in life where surprises are not fun: the operating room and a post-funeral meeting with the estate planning attorney.

You could have the best of intentions and even the best estate plan possible. But if your heirs haven’t been told what you have in mind, you may create a legacy of bitterness and family discord, according to Forbes in “How to Keep Your Heirs from Fighting Over Your Estate.”

You’d think talking about your intentions ahead of time would be easy enough, but many people choose not to do so—regardless of what happens. Research shows that fewer than 33% of people discuss their estate plans with their children. More than 20% of bequest recipients fight over inheritances. But 63% of families reporting no disputes over inheritance issues tell surveys they’ve had advance notice of what to expect. And more than 80% believe they were treated fairly. Talking about your plans with the people involved can make a huge difference.

If the terms of your will or trust are unique or vary from state intestacy guidelines, speaking to everyone involved is critical. For example, if you plan to leave 80% of your estate to one child instead of splitting it 50-50 between both sons, let them know your rationale for your decision. The more your heirs see your logic, the less apt they’ll be to contest your estate plan. Plus, if there’s a conflict, you’re still around to help work out the issues.

Another way to help reduce conflicts is by adding a “no-contest” clause. This means if an heir contests the will or trust, they get nothing.

If your family includes some members who can’t get along with others, there may be nothing you can do about preventing any arguments, but for most families, speaking candidly with your heirs now will have a big impact on how the family manages after you have passed. At the very least, you will have peace of mind knowing that you made the effort.

Reference: Forbes (October 31, 2016) “How to Keep Your Heirs from Fighting Over Your Estate”

Fearing Loss of Control is One Reason People try to Hide Alzheimer’s

Planning for life with Alzheimer’s includes selecting trusted family members or friends who can assist with legal and financial matters.

It was at least three years after his diagnosis that comedic actor Gene Wilder revealed he was suffering from Alzheimer’s disease. This is not unusual, according to experts discussing his situation in the Investment News article, “Hiding Alzheimer's, like Gene Wilder did, is natural, so prepare for it with all clients.” Wilder, star of Blazing Saddles, Willy Wonka and the Chocolate Factory and many other classic comedies, died at age 83 from complications of Alzheimer's disease. He wanted to leave his audiences laughing, rather than being sad that he was suffering from this dreaded disease.

Most Alzheimer's patients will hide their symptoms as long as they can because they fear losing control of their lives if family or friends are under the impression they can’t take care of things on their own.

The first thing to recognize is that cognitive impairment is a significant risk. Financial advisers and elder law attorneys should take steps to protect these clients' finances from the impact of debilitating conditions like Alzheimer's. This is best accomplished before they notice any changes in the individual’s behavior. With dementia and Alzheimer's so common in the elderly, criminals frequently target older individuals because they can more easily be swayed into releasing money or disclosing personal information.

The first thing elder law attorneys will do is have their clients execute a legal document that lists the family members or friends whom the attorney can contact to discuss private information if he or she believes the client is starting to have cognitive problems. Clients may need some time to consider this difficult issue. However, if they refuse to provide this information, financial planners will often require them to sign a different document that releases the adviser from liability if the client is harmed because of his or her cognitive decline.

Get the complete legal picture from an experienced elder law attorney.

Advisers may also have a checklist to complete each year about their clients to monitor changes and document them over time. When they see “red flags,” like a client with memory loss or difficulty understanding the consequences of decisions, advisers may ask that a trusted contact start attending planning meetings.

There is no way to make a diagnosis of Alzheimer’s pleasant. But once this has occurred, the family needs to address the medical, legal and financial matters that will be faced in the future. An elder law attorney with experience in this area will be able to help.

Reference: Investment News (September 1, 2016) “Hiding Alzheimer's, like Gene Wilder did, is natural, so prepare for it with all clients”

Social Security’s Less Known Customer Services

Certain organizations are known for providing amazing customer service. Social Security is not usually one of them. However, there are some services that Social Security does offer that are not well known and that could make life easier for many.

Good news is hard to find when it comes to dealing with large government bureaucracies, including Social Security. That makes this information provided by AARP’s article, “Discover Little-Known Social Security Benefits,” especially welcome.

Some years ago, Social Security officials saw that the long waiting time for decisions on disability applications was resulting in severe hardship for the seriously ill. As a consequence, the agency established the Compassionate Allowances List.

This program’s goal is to swiftly grant disability status to those who suffer from any of the 225 serious medical conditions on the list. They include rare diseases, cancers, traumatic brain injury, stroke, early onset Alzheimer's disease and related dementias, schizophrenia, cardiovascular disease, multiple organ transplants and autoimmune diseases.

The Social Security Administration says that folks who can show they suffer from any of these afflictions will receive approval in weeks rather than months or years.

If you see that a loved one isn’t good at managing money, Social Security can help with its Representative Payee Program. It matches people who require assistance managing their finances with people who are willing and able to help them.

If you're concerned that a loved one has become incapable of managing or directing the management of his or her benefits, speak with an elder law attorney who focuses on Social Security to discuss your concerns.

Social Security will typically look to family members or friends to serve as representative payees. If no one is available, they work with social service agencies to locate people to serve as representative payees.

Social Security also provides free interpretation services for people who do not speak English. The agency can translate a surprisingly large number of languages—from Arabic and Armenian to Tagalog and Vietnamese. They also provide interpretation for more common languages like Spanish, French and Italian. These services are offered by phone and at local Social Security offices.

Reference: AARP (August 2016) “Discover Little-Known Social Security Benefits”

Collecting Death Benefits from Life Insurance Policies

If you are the beneficiary of someone’s life insurance policy, you should know that there are options as to how the policy funds, known as death benefits, can be distributed.

In most situations, the beneficiary of a life insurance policy does not have to pay income taxes on death benefits, according to a recent article in Forbes, “Are Life Insurance Proceeds Subject to Taxes?”

But depending on your situation, you might want to consider different options for that money that may be more productive in the long term. The insurance company can cut a check, but you can also have the insurer hold on to all or some of the funds and distribute them at a later date or in periodic distributions. If the money is held by the insurer, it will continue to earn interest—and that interest is taxable.

Another option is to transfer those funds to a trust that could control the proceeds of the policy based on the stipulations you set when creating it. However, remember that trust planning can get complicated if you establish “incidents of ownership” in the policy, in other words, if you are controlling the policy in some way. For example, such “incidents” include borrowing against it, using it as collateral or assigning it in a contract. If that happens, the proceeds of the policy might be considered a part of your estate and be subject to estate taxes when you die. Those estate taxes may be delayed if your spouse is the beneficiary, but taxes may be due when he or she passes away.

Also, remember that while you can state in your will that the proceeds of a life insurance policy should go to one of your beneficiaries, only the named beneficiary of the policy gets the funds. When your intentions change, you must contact the life insurance company to update your beneficiary designation. You should also update any 401(k)s or IRAs.

To avoid any expensive mistakes, including creating taxable events, speak with an estate planning attorney to make sure that all of your life insurance policies are aligned with the overall goals of your estate plan. These can be complex financial instruments, and the help of an experienced professional will ensure that you reach your ultimate goal: protecting your loved ones.

Reference: Forbes (August 30, 2016) “Are Life Insurance Proceeds Subject to Taxes?”

Not Having a Will is Risky Business

You know you need life insurance to protect your loved ones. But do you know that having a will is equally important to protect against risks?

Without a will, your family faces a number of potential financial disasters. If you think you don’t need a will because you aren’t wealthy or only own one home, you may be surprised to learn how not having a will leaves your loved ones open to a number of serious and costly problems.

Nerd Wallet’s recent article, “5 Hidden Dangers of Not Having a Will,” lists some of the most challenging issues, reminding you why it’s so important to have an up-to-date, signed will.

1. Spendthrift heirs. It’s pretty rare that a child can handle a large sum of money all at once. Some heirs are just bad at handling money, and others may have addiction issues—like gambling or abusing illegal substances. Either way, handing them a windfall can enable bad habits and anger other beneficiaries. Those who didn’t get as much might hire lawyers to fight the proposed distribution.
2. Unexpected or contested heirs. Sometimes there can be confusion and questions about the actual beneficiaries of an estate. Someone might appear unexpectedly during the settlement.
3. Property (and probate) in more than one state. If you have property in several states, dying without a will can result in some of your estate having to go through probate in multiple states. This can be costly and time-consuming—particularly if each beneficiary hires an attorney in each state. Let’s do a quick math problem: there are three beneficiaries with estate property in four states. How many attorneys might be hired? Answer: 12.
4. Fraudulent wills. If there’s no will in place, it gives the opportunity for a treasure seeker to make a fake, particularly if you have a big estate. Remember Howard Hughes? He died with no immediate family and no will. Within a short period of time there were several purported wills claiming to be the legitimate one. His estate spent millions defending against the fake documents. It’s harder to do this these days with more sophisticated analysis tools, but why subject your heirs to potential headaches and unnecessary legal bills?
5. Beneficiaries don’t like the appointed court executor. Without a will, there’s no designated executor, so the probate court will appoint one—typically an attorney. There’s no way to know how well or poorly the beneficiaries will get along with this person in charge of taking inventory, appraising and distributing the estate. For the most part, family members will do this faster than any court-appointed executor, who has little incentive to hurry things along.

Having a will prepared by a knowledgeable estate planning attorney will help your family avoid these five issues and more. It will also send a clear message that you cared enough to take care of them—a worthwhile legacy.

Reference: Nerd Wallet (August 3, 2016) “5 Hidden Dangers of Not Having a Will”